A new report from IMS Research finds that that the transition to IP-based technology in the security industry is increasingly changing the role of the security systems integrator.
The report, Security Systems Integration - World - 2012 Edition, cites a number of factors as contributing to this change. These include an increasingly competitive environment for new IT integrators entering the security market, as well as declining product margins and the increased importance of advanced networking knowledge.
“As more IT integrators have been entering this market, they have been fundamentally changing the way security systems integrators do business," says Paul Bremner, market analyst at IMS Research. "IT integrators have brought their business model of lower equipment costs but higher service costs, and this has translated well when dealing with IP-based technology, which often requires a lot of network planning in the design stage to offer the best available solution."
The research indicates that there are significant rewards for those integrators that adapt toward IP. The world market for systems integration is forecasted by IMS to grow at an average rate of almost 10 percent to 2016. "Design and consultancy services are likely to become a larger part of the typical integrator’s revenues," adds IMS's Bremner. "Such services include risk analysis, vulnerability assessment and client security policy analysis, to name but a few.”
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The report finds that one strategy some security integrators are taking is to focus on specific vertical markets, as the knowledge the integrator gains from one project can then be directly applied to another project in the same vertical. This synergy can further bolster the margin obtained from services, says the study, which can sometimes exceed 30 percent. This figure compares favorably with equipment margins, which can be lower than 10 percent in extreme cases.
Bremner continues, “The opportunity for design and consultancy revenues is highly dependent on the vertical market in question. Projects in transportation for example, are much more likely to include design and consultancy revenues than projects in either retail or commercial. This is mainly due to the nature of the projects themselves, but is also, in part, due to the different organizational structures found within those verticals.”
Nonetheless, IMS warns that integrators should not lose focus on providing the highest quality technology solutions to their customers. Keeping track of major developments from their product vendors will still be fundamental to their success, adds the report. The world market for physical security equipment sold through integrators and installers is projected to be worth over $38 billion by 2016.
More information on the report is available at IMS Research's Security Market Intelligence website.
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